ase 2:17-cv-06855-0DW-PLA DocL mem .:10 8/17 Page 1of20 ......Plaintiff, Case No. CV17-6855-0DW(PLAx) v. Complaint for Permanent Injunction . M&T FINANCIAL GROUP, a . and Other Equitable

1 ase 2:17-cv-06855-0DW-PLA DocL mem .:10 8/17 CLERK, U.S. DIS11UCT COURT

19/18/17 ~~CTOFCAUFO&"IIA

BY: l.Jv DEPUTY

I Page 1of20 Page ID #:8

FILED CLERK, U.S. DISTRICT COURT

09/18/2017

E~~TRICT OF CALIFORNIA

DEPUTY

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DAVID SHONKA ACTING GENERAL COUNSEL

JOANNIE VIEi SAMUEL LEVINE AUDREY AUSTIN [email protected] slevine [email protected] [email protected] Federal Trade Commission

B~230 South Dearborn Street, Room 3030 C

Chicago, Illinois 60604 Tel: (312) 960-5634; Fax: (312) 960-5600

BARBARA CHUN, Local Counsel (Cal. Bar No.186907) [email protected] Federal Trade Commission I 0990 Wilshire Boulevard, Suite 400 Los Angeles, California 90024 Tel: (310) 824-4343; Fax: (310) 824-4380

Attorneys for Plaintiff FEDERAL TRADE COMMISSION

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION,

Plaintiff, Case No. CV17-6855-0DW(PLAx)

v. Complaint for Permanent Injunction

M&T FINANCIAL GROUP, a and Other Equitable Relief

corporation, also d/b/a StuDebt, Student Debt Relief Group, SDRG, Student Loan Relief Counselors, SLRC, and Capital Advocates Group,

AMERICAN COUNSELING CENTER

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mailto:[email protected]




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CORP., a corporation, also d/b/a StuDebt, Student Debt Relief Group, SORG, Student Loan Relief Counselors, SLRC, and Capital Advocates Group, and

SALAR TAHOUR, individually, and as an officer of M&T FINANCIAL GROUP and AMERICAN COUNSELING CENTER CORP.,

Defendants.

Plaintiff, the Federal Trade Commission ("FTC"), for its Complaint alleges:

1. The FTC brings this action under Section 13(b) of the Federal Trade

Commission Act ("FTC Act"), 15 U.S.C. § 53(b ), and the Telemarketing and

Consumer Fraud and Abuse Act ("Telemarketing Act"), 15 U.S.C. §§ 6101-6108,

to obtain temporary, preliminary, and permanent injunctive relief, rescission or

reformation of contracts, restitution, the refund of monies paid, disgorgement of

ill-gotten monies, and other equitable relief for Defendants' acts or practices in

violation of Section 5(a), 15 U.S.C. § 45(a), and the FTC's Telemarketing Sales

Rule ("TSR"), 16 C.F .R. Part 310, in connection with their deceptive marketing

and sale of student loan debt relief services.

JURISDICTION AND VENUE

2. This Court has subject matter jurisdiction pursuant to 28 U.S.C.

§§ 1331, 1337(a), and 1345, and 15 U.S.C. §§ 45(a), 53(b), and 6102(c).

3. Venue is proper in this district under 28 U.S.C. § 1391(b)(l), (b)(2),

(c), and (d), and 15 U.S.C. § 53(b).

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Case 2:17-cv-06855-ODW-PLA Document 3 Filed 09/18/17 Page 2 of 20 Page ID #:9

2 PLAINTIFF

3 4. The FTC is an independent agency of the United States Government

created by statute. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC

Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or

affecting commerce. The FTC also enforces the Telemarketing Act, 15 U.S.C. §§

6101-6108. Pursuant to the Telemarketing Act, the FTC promulgated and enforces

the TSR, 16 C.F.R. Part 310, which prohibits deceptive and abusive telemarketing

acts or practices in or affecting commerce.

5. The FTC is authorized to initiate federal district court proceedings, by

its own attorneys, to enjoin violations of the FTC Act and the TSR and to secure

such equitable relief as may be appropriate in each case, including rescission or

reformation of contracts, restitution, the refund of monies paid, and the

disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b), 56(a)(2)(A), and 6102(c).

DEFENDANTS

6. Defendant M&T Financial Group ("M&T Financial"), also doing

business as StuDebt, Student Debt Relief Group, SDRG, Student Loan Relief

Counselors, SLRC, and Capital Advocates Group, is a California corporation with

its registered address at 11766 Wilshire Boulevard, Suite 310, Los Angeles,

California 90025. M&T Financial transacts or has transacted business in this

district and throughout the United States. At all times material to this Complaint,

acting alone or in concert with others, M&T Finanical has advertised, marketed,

distributed, or sold student loan debt relief services to consumers throughout the

United States.

7. Defendant American Counseling Center Corp. ("American

Counseling"), also doing business as StuDebt, Student Debt Relief Group, SDRG,

Student Loan Relief Counselors, SLRC, and Capital Advocates Group, is a

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California corporation with its registered address at 11766 Wilshire Boulevard,

Suite 310, Los Angeles, California 90025. American Counseling transacts or has

transacted business in this district and throughout the United States. At all times

material to this Complaint, acting alone or in concert with others, American

Counseling has advertised, marketed, distributed, or sold student loan debt relief

services to consumers throughout the United States.

8. Defendant Salar Tahour is the sole owner and a manager of M&T

Financial and American Counseling. At all times material to this Complaint,

acting alone or in concert with others, he has formulated, directed, controlled, had

the authority to control, or participated in the acts and practices of M&T Financial

and American Counseling, including the acts and practices set forth in this

Complaint. For example, Tahour registered and paid for phone numbers and

domain names and is the sole signatory on the bank accounts and merchant

processing accounts for M&T Financial. In addition, Tahour personally responded

to complaints filed about the companies with the California Attorney General's

Office and the Better Business Bureau. Defendant Tahour resides in this district

and, in connection with the matters alleged herein, transacts or has transacted

business in this district and throughout the United States.

9. Defendants M&T Financial and American Counseling (collectively,

"Corporate Defendants") have operated as a common enterprise while engaging in

the deceptive acts and practices and other violations of law alleged below.

Defendants have conducted the business practices described below through

interrelated companies, which have common ownership, officers, managers,

business functions, and office locations, and which share fictitious business names,

SLRC and SDRG. Because these Corporate Defendants have operated as a

common enterprise, each of them is jointly and severally liable for the acts and

practices alleged below. Defendant Tahour has formulated, directed, controlled,

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had the authority to control, or participated in the acts and practices of the

Corporate Defendants that constitute the common enterprise.

COMMERCE

10. At all times material to this Complaint, Defendants have maintained a

substantial course of trade in or affecting commerce, as "commerce" is defined in

Section 4 of the FTC Act, 15 U.S.C. § 44.

DEFENDANTS' DECEPTIVE

STUDENT LOAN DEBT RELIEF OPERATION

11. Since 2014, Defendants have operated an unlawful debt relief

enterprise to bilk consumers out of millions of dollars. Preying on widespread

anxiety and confusion around student debt, Defendants misrepresent the cost and

features of federal student loan repayment programs in order to extract fees from

the struggling consumers these programs are designed to help. After reaching

consumers through an aggressive outbound telemarketing campaign that includes

illegal calls to consumers on the National Do Not Call Registry, Defendants work

to gain consumers' trust by falsely claiming they work for or are affiliated with the

U.S. Department of Education ("ED"). Defendants then entice consumers with

false promises that they qualify for federal programs that would permanently

reduce their monthly loan payments to a fixed amount. To access these free

government programs, Defendants tell consumers that they must pay an advance

fee of up to $104 7. In addition to these illegal advance fees, Defendants also

collect and retain monthly fees that consumers believe are being applied to pay

down their loans. Finally, Defendants also instruct consumers to ignore future

communications with their loan servicers and ED, and to communicate only with

Defendants, who many consumers believe will now be servicing their loans.

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Background on Student Loan Repayment and Forgiveness Programs

12. Student loan debt is the second largest class of consumer debt; more

than 42 million Americans collectively owe more than $1.3 trillion on student

loans. The student loan market continues to show elevated levels of distress

relative to other types of consumer debt.

13. To address this mounting level of distressed debt, the federal

government offers loan forgiveness through income-driven repayment ("IDR")

programs that enable borrowers to reduce their monthly payments and have

portions of their loans forgiven. IDR programs allow eligible borrowers to limit

their monthly payments based on a percentage of their discretionary monthly

income. To remain in an IDR program, borrowers must recertify their income and

family size annually. Obtaining forgiveness through IDR programs requires a

minimum of 20 or 25 years of qualifying payments. No loans have been forgiven

yet under any of the IDR programs.

J 4. Because a borrower's income is likely to fluctuate over the life of the

loan, monthly payments under the IDR programs can vary considerably from year

to year. If a borrower's income were to increase over the repayment period, for

example, the monthly payment amount could correspondingly increase to the point

where those payments would pay off the loan before any amount could be forgiven

at the end of the repayment term.

15. ED and state government agencies also administer a limited number

of student loan forgiveness and discharge programs. Most consumers, however,

are not eligible for these programs because of strict eligibility requirements. For

example, Public Service Loan Forgiveness applies to employees of governmental

units or non-profit organizations who make timely monthly payments for a period

of ten years while employed in the public or non-profit sector.

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16. Consumers can apply for loan repayment and forgiveness programs

through ED or their student loan servicers at no cost; these programs do not require

the assistance of a third party or the payment of any fees.

1 7. ED will grant forbearance while processing applications for an

alternative repayment plan, and in some cases of hardship. During forbearance,

unpaid interest is added to the principal balance.

18. ED also allows consumers with multiple federal loans to consolidate

them into one "Direct Consolidation Loan" with a fixed interest rate and single

monthly payment. ED does not charge for consolidation and offers a dedicated

helpline and webpage to assist borrowers with the process.

Defendants' Deceptive Marketing of Student Loan Debt Relief Services

19. Defendants typically first contact consumers via outbound

telemarketing calls, including calls to consumers who have registered their

telephone numbers on the National Do Not Call Registry. In many instances,

Defendants already are aware that the consumers they are contacting have

outstanding student loans. Many consumers who receive the calls do not know

how Defendants obtained their telephone numbers and how they knew that the

consumers had outstanding student loans.

20. During the telemarketing calls, Defendants often lead consumers to

believe that they are affiliated with ED and that they work directly with ED to

enroll consumers in ED programs that will lower their monthly payments. For

example, Defendants have told some consumers that they "work on behalf of the

government," are a "partner of ED," or "represent ED in assisting students." To

further the misimpression that they are affiliated with the U.S. government,

Defendants also use email addresses that end in ".us."

21 . During the telemarketing calls, Defendants inform consumers that

they are eligible, or "preapproved," for a government "forgiveness" program that

would significantly reduce consumers' current monthly student loan payments,

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often by hundreds of dollars each month. In some instances, Defendants make this

promise about lowering consumers' monthly payments without even asking about

consumers' monthly income.

22. Defendants typically tell consumers that their new, lower monthly

payment amount will be their payment amount for the next 10 or 20 years, and that

thereafter, the consumers' remaining loan balances will be forgiven. Defendants

also sometimes promise consumers that they will save a specific amount of money,

usually in the thousands of dollars, by enrolling in the program Defendants

describe.

23. Defendants' representations that they are able to procure a permanent

reduction in consumers' monthly payments are false or unsubstantiated because

none ofED's IDR programs guarantees consumers a fixed, reduced monthly

payment for more than one year. Under ED's IDR programs, monthly payments

fluctuate based on consumers' income in a given year, which consumers must

recertify annually, and the amount forgiven depends on what remains unpaid at the

end of the repayment period. In many cases, consumers' income will rise over the

years-long repayment period, and as consumers' income rises, so will their

monthly payment in a given year. As a result, the amount that would be forgiven

at the end of the repayment term typically would be less than Defendants have

promised.

24. If consumers are initially unwilling to work with Defendants,

Defendants often attempt to convince them to do so by telling consumers that the

federal programs were created by then-President Obama under the "Student Loan

Forgiveness Act of2012" (a proposal never signed into law), and that these

programs will, or likely will, be eliminated soon. In Defendants' subsequent

emails to consumers requesting personal and financial information, Defendants

also pressure consumers to act quickly by stating, for example, that matters are

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"time-sensitive," and that failure to provide Defendants with the requested

information could result in "dropped enrollment" from the program.

Defendants' Advance and Monthly Fees

25. After persuading consumers to work with Defendants to permanently

lower their monthly student loan payments, Defendants' telemarketers typically

tell consumers that to enroll in the federal program, consumers are required to pay

an advance fee, which Defendants call an "enrollment," "processing," or

"application" fee. Defendants represent that if consumers do not pay the advance

fee, they will not be able to enroll in the program. The fee Defendants charge

consumers typically ranges from $398 to $1047 and is collected in three

installments. In fact, none ofED's programs requires an advance fee, or any fee,

to apply. Consumers can apply for ED's programs on their own, at no cost.

Defendants' telemarketers typically obtain consumers' bank, debit or other

payment information during the initial telemarketing call, and begin collecting the

advance fee installments from consumers immediately. Defendants routinely

charge consumers advance fees before enrolling consumers in any federal program.

26. In addition to charging an advance fee, Defendants also frequently

charge consumers a monthly fee, which typically is $39. Defendants falsely

represent that this amount will be the consumer's new, reduced monthly loan

payment. Defendants collect and retain these monthly fees, however-they do not

apply the monthly fees to pay down consumers' loans, as consumers are led to

believe.

27. In numerous instances, Defendants have charged this type of monthly

fee to unemployed and otherwise financially strapped consumers who likely would

qualify for a $0 monthly payment under an IDR program. In those instances,

Defendants retain the entire monthly fee and do not use any portion of the fee to

pay down consumers' outstanding loan balances. Some consumers have paid

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Defendants hundreds of dollars in monthly fees they can ill afford before

discovering that none of those fees were applied to pay down their student loans.

Defendants' Contracts

28. Once Defendants have convinced consumers to enroll in the program

and turn over their payment information, Defendants typically email consumers a

link to a lengthy form contract that consumers are required to sign electronically.

As consumers remain on the phone, Defendants pressure them to click through the

document and electronically sign multiple pages, including a power of attorney

form. In some instances, Defendants represent that consumers do not need to read

the agreement carefully because the information contained in the contract was

already discussed in the telemarketing call.

29. In fact, Defendants' contract typically contains information that was

not discussed with consumers or that directly contradicts statements made to

consumers during the telemarketing call. For example, although Defendants

represent in the telemarketing calls that they are affiliated with ED, the form

contract states that Defendants, in fact, are not affiliated with ED.

30. Similarly, although Defendants represent in the telemarketing calls

that the $3 9 monthly fee will be used to pay down consumers' loans, the contracts

typically state that these fees will be used to pay for unrelated products or services

that were never discussed in the telemarketing call, such as "Involuntary

Unemployment Insurance," "Auto Buying Service and Maintenance," or "tax

preparation." This statement often is buried in the middle of the contract, in dense

text listing various other terms and conditions.

Cutting Off Consumers' Communication with Servicers and ED

3 1. In many instances, Defendants falsely represent that they will be the

new servicer of consumers' student loans under the touted federal program.

Defendants tell consumers to stop communicating with, and disregard

correspondence from, their current loan servicers and ED. Instead, Defendants

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instruct consumers to direct all questions and concerns to Defendants, often

delaying or preventing consumers from discovering that they can work on their

own or with their actual servicer to modify their loan terms for free. In some

instances, Defendants even tell consumers that communicating with their servicers

could jeopardize the consumer's application for the federal program.

32. Defendants also often ask consumers to provide their Federal Student

Aid credentials that are required to access their loan information in the federal

government's database. Once Defendants have access to consumers' loan account,

they often change consumers' username, password, security question, or contact

information. As a result, many consumers stop receiving correspondence from

their loan servicers and from ED and temporarily lose access to their own loan

information.

33. Consumers often discover that they have been scammed only after

talking to their actual loan servicer and realizing that Defendants charged them

hundreds of dollars to enroll in a program that they could have enrolled in by

themselves, for free.

34. In some instances, Defendants even take actions that may be

detrimental to consumers' ability to repay their loans. For example, Defendants

routinely consolidate consumers' loans even though under certain ED forgiveness

programs, this could cause borrowers to lose credit for payments already made and

thereby delay their ability to obtain forgiveness.

3 5. Some consumers who discover that they have been scammed cancel

or block their accounts to prevent further charges by Defendants. In some

instances, these consumers receive threats from Defendants that consumers'

accounts will be sent to collections and that their credit scores will be negatively

affected.

36. In numerous instances, Defendants have refused to provide refunds to

consumers who request them after learning that Defendants had scammed them. In

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some instances, Defendants have provided only partial refunds that are

substantially less than what consumers paid to Defendants.

Defendants' Unlawful Calls to Consumers

n the National Do Not Call Registry

37. Defendants frequently place outbound telemarketing calls to

consumers who have registered their telephone numbers on the National Do Not

Call Registry.

38. Defendants have placed such calls to area codes without paying the

required annual fee for access to the telephone numbers within that area code that

are included in the National Do Not Call Registry.

39. Dozens of consumers have complained to the FTC and BBB about

receiving unwanted outbound calls from Defendants in spite of having registered

with the National Do Not Call Registry.

THE FTC ACT

40. Section 5(a) of the FTC Act, 15 U.S.C. §45(a), prohibits "unfair or

deceptive acts or practices in or affecting commerce."

41. Misrepresentations or deceptive omissions of material fact constitute

deceptive acts or practices prohibited by Section 5(a) of the FTC Act.

VIOLATIONS OF THE FTC ACT

Count I

Deceptive Student Loan Debt Relief Representations

42. In numerous instances, in connection with the advertising, marketing,

promotion, offering for sale, or sale of student loan debt relief services, Defendants

represent, directly or indirectly, expressly or by implication, that:

a. Defendants are affiliated or work directly with the government

or the Department of Education;

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b. Defendants will enroll consumers in a student loan repayment

or forgiveness program that will have their monthly payments reduced

to a fixed amount for a fixed number of years;

c. The government repayment or forgiveness program requires

consumers to pay a fee to enroll;

d. Consumers' monthly payments to Defendants will be applied

toward consumers' student loans; and

e. Defendants will assume responsibility for the servicing of

consumers' student loans.

43 . In truth and in fact, in numerous instances in which Defendants

make the representations set forth in Paragraph 42 of this Complaint, such

representations are false or not substantiated at the time Defendants make them.

44. Therefore, Defendants' representations as set forth in Paragraph 42 of

this Complaint are false or misleading and constitute deceptive acts or practices in

violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

THE TELEMARKETING SALES RULE

45. Congress directed the FTC to prescribe rules prohibiting abusive and

deceptive telemarketing acts or practices pursuant to the Telemarketing Act, 15

U.S.C. §§ 6101-6108. The FTC adopted the original TSR in 1995, extensively

amended it in 2003, and amended certain provisions thereafter. 16 C.F.R. Part

310.

46. Defendants are "seller[s]" or "telemarketer[s]" engaged in

"telemarketing" as defined by the TSR, 16 C.F .R. § 310 .2( dd), (ff), (gg). A

"seller" means any person who, in connection with a telemarketing transaction,

provides, offers to provide, or arranges for others to provide goods or services to a

customer in exchange for consideration. 16 C.F.R. § 310.2( dd). A "telemarketer"

means any person who, in connection with telemarketing, initiates or receives

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telephone calls to or from a customer or donor. 16 C.F.R. § 310.2(ff).

"Telemarketing" means a plan, program, or campaign which is conducted to

induce the purchase of goods or services or a charitable contribution, by use of one

or more telephones and which involves more than one interstate telephone call. 16

C.F.R. § 310.2(gg).

4 7. Defendants are sellers or telemarketers of "debt relief services" as

defined by the TSR, 16 C.F.R. § 310.2(0). Under the TSR, a "debt relief service"

means any program or service represented, directly or by implication, to

renegotiate, settle, or in any way alter the terms of payment or other terms of the

debt between a person and one or more unsecured creditors, including, but not

limited to, a reduction in the balance, interest rate, or fees owed by a person to an

unsecured creditor or debt collector. 16 C.F .R. § 310.2( o ).

48. The TSR prohibits sellers and telemarketers from requesting or

receiving payment of any fees or consideration for any debt relief service until and

unless:

a. The seller or telemarketer has renegotiated, settled, reduced, or

otherwise altered the terms of at least one debt pursuant to a

settlement agreement, debt management plan, or other such valid

contractual agreement executed by the customer; and

b. The customer has made at least one payment pursuant to that

settlement agreement, debt management plan, or other valid

contractual agreement between the customer and the creditor; and

c. To the extent that debts enrolled in a service are renegotiated,

settled, reduced, or otherwise altered individually, the fee or

consideration either:

1. Bears the same proportional relationship to the total fee

for renegotiating, settling, reducing or altering the terms of the

entire debt balance as the individual debt amount bears to the

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entire debt amount. The individual debt amount and the entire

debt amount are those owed at the time the debt was enrolled in

the service; or

IL Is a percentage of the amount saved as a result of the

renegotiation, settlement, reduction, or alteration. The

percentage charged cannot change from one individual debt to

another. The amount saved is the difference between the

amount owed at the time the debt was enrolled in the service

and the amount actually paid to satisfy the debt. 16 C.F .R. §

310.4(a)(5)(i).

49. The TSR prohibits sellers and telemarketers from misrepresenting,

directly or by implication a seller' s or telemarketer's affiliation with, or

endorsement or sponsorship by, any person or government entity. 16 C.F.R. §

310.3(a)(2)(vii).

50. The TSR prohibits sellers and telemarketers from misrepresenting

directly or by implication, any material aspect of any debt relief service, including,

but not limited to, the amount of money or the percentage of the debt amount that a

customer may save by using the service. 16 C.F.R. § 310.3(a)(2) (x).

51. The TSR prohibits sellers and telemarketers from initiating or causing

others to initiate outbound telephone calls to consumers who have registered their

telephone numbers on the National Do Not Call Registry. 16 C.F.R. §

310.4(b )(1 )(iii)(B).

52. The FTC allows sellers, telemarketers, and other permitted

organizations to access the National Do Not Call Registry over the Internet at

telemarketing.donotcall.gov, to pay the fee(s) if required by the TSR, and to

download a list of numbers that are prohibited from being called.

53. The TSR prohibits sellers and telemarketers from calling any

telephone number within a given area code unless the seller on whose behalf the

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call is made has paid the annual fee for access to the telephone numbers within that

area code that are included in the National Do Not Call Registry. 16 C.F.R. §

310.8.

54. Consumers who receive telemarketing calls to their registered

numbers can complain of National Do Not Call Registry violations the same way

they registered, through a toll-free telephone call or over the Internet at

donotcall.gov, or by otherwise contacting law enforcement authorities.

55. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. §

6102(c), and Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of

the TSR constitutes an unfair or deceptive act or practice in or affecting commerce,

in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

VIOLATIONS OF THE TELEMARKETING SALES RULE

Count II

Advance Fee for Debt Relief Services

56. In numerous instances, in connection with the telemarketing of

student loan debt relief services, Defendants request or receive payment of a fee or

consideration for debt relief services before:

a. Defendants have renegotiated, settled, reduced, or otherwise

altered the terms of at least one debt pursuant to a settlement

agreement, debt management plan, or other such valid contractual

agreement executed by the customer; and

b. The customer has made at least one payment pursuant to that

settlement agreement, debt management plan, or other valid

contractual agreement between the customer and the creditor.

57. Defendants' acts or practices, as described in Paragraph 56 of this

Complaint, are abusive telemarketing acts or practices that violate Section

310.4(a)(5)(i) of the TSR, 16 C.F.R. §310.4(a)(5)(i).

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Count III

Misrepresentation of Affiliation


student loan debt relief services, Defendants misrepresent, directly or indirectly,

expressly or by implication, that Defendants are affiliated with, or endorsed or

sponsored by, the government or the Department of Education.

59. Defendants' acts and practices, as described in Paragraph 58 of this

Complaint, are deceptive telemarketing acts or practices that violate Section

310.3(a)(2)(vii) of the TSR, 16 C.F.R. § 310.3(a)(2)(vii).

Count IV

Material Debt Relief Misrepresentations


student loan debt relief services, Defendants misrepresent, directly or indirectly,

expressly or by implication, material aspects of their debt relief services, including

that:

a. Defendants will enroll consumers in a student loan repayment or

forgiveness program that will reduce their monthly payments to a

fixed amount for a fixed number of years;

b. The government repayment or forgiveness program requires

consumers to pay a fee to enroll;

c. Consumers' monthly payments to Defendants will be applied

toward consumers' student loans; and

d. Defendants will assume responsibility for the servicing of

consumers' student loans.

61. Defendants' acts and practices, as described in Paragraph 60 of this

Complaint, are deceptive telemarketing acts or practices that violate Section

310.3(a)(2)(x) of the TSR, 16 C.F.R. § 310.3(a)(2)(x).

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Count V

Calls in Violation of National Do Not Call Registry

62. In connection with telemarketing, Defendants initiated or caused

others to initiate numerous outbound telephone calls to consumers who have

registered their telephone numbers on the National Do Not Call Registry in

violation of the TSR, 16 C.F .R. § 310.4(b )(1 )(iii)(B).

Count VI

Failure to Pay Required Fee for Access

to National Do Not Call Registry

63 . In connection with telemarketing, Defendants initiated or caused

others to initiate numerous outbound telephone calls to telephone numbers within a

given area code when Defendants had not, either directly or through another

person, paid the required annual fee for access to the telephone numbers within

that area code that are included in the National Do Not Call Registry in violation of

the TSR, 16 C.F.R. § 310.8.

CONSUMER INJURY

64. Consumers have suffered and will continue to suffer substantial injury

as a result of Defendants' violations of the FTC Act and the TSR. In addition,

Defendants have been unjustly enriched as a result of their unlawful acts or

practices. Absent injunctive relief by this Court, Defendants are likely to continue

to injure consumers, reap unjust enrichment, and harm the public interest.

THIS COURT'S POWER TO GRANT RELIEF

65. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court

to grant injunctive and such other relief as the Court may deem appropriate to halt

and redress violations of any provision of law enforced by the FTC. The Court, in

the exercise of its equitable jurisdiction, may award ancillary relief, including

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rescission or reformation of contracts, restitution, the refund of monies paid, and

the disgorgement of ill-gotten monies, to prevent and remedy any violation of any

provision of law enforced by the FTC.

66 . Section 6(b) of the Telemarketing Act, 15 U.S.C. § 6105(b),

authorizes this Court to grant such relief as the Court finds necessary to redress

injury to consumers resulting from Defendants' violations of the TSR, including

the rescission or reformation of contracts, and the refund of money.

PRAYER FOR RELIEF

Wherefore, Plaintiff FTC, pursuant to Section 13(b) of the FTC Act, 15

U.S.C. § 53(b), and the Court's own equitable powers, requests that the Court:

A. Award Plaintiff such preliminary injunctive and ancillary relief as

may be necessary to avert the likelihood of consumer injury during the pendency

of this action and to preserve the possibility of effective final relief, including but

not limited to, a temporary and preliminary injunction, asset freeze, appointment of

a receiver, an evidence preservation order, and expedited discovery;

B. Enter a permanent injunction to prevent future violations of the FTC

Act and the TSR;

C. Award such relief as the Court finds necessary to redress injury to

consumers resulting from Defendants' violations of the FTC Act and the TSR,

including but not limited to, rescission or reformation of contracts, restitution, the

refund of monies paid, and the disgorgement of ill-gotten monies; and

D. Award Plaintiff the costs of bringing this action, as well as such other

and additional relief as the Court may determine to be just and proper.

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Respectfully submitted,

David Shonka

Acting General Counsel

Dated: September 18, 2017 Joannfsl Wei, IL Bar #6276144 Samuel Levine, IL Bar #6309543 Audrey Austin, IL Bar #6307653 Attorneys for Plaintiff FEDERAL TRADE COMMISSION

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ase 2:17-cv-06855-0DW-PLA DocL mem .:10 8/17 Page 1of20 ......Plaintiff, Case No. CV17-6855-0DW(PLAx) v. Complaint for Permanent Injunction . M&T FINANCIAL GROUP, a . and Other Equitable

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